Guernsey offers ‘one-stop shop’ for financial services in China

02 October 2018

Guernsey is Europe’s leading jurisdiction for insurance transformer vehicles and Insurance-Linked Securities and the breadth of its finance industry makes it a unique one-stop shop for financial services from China, Guernsey Finance told more than 100 industry professionals at an insurance-focused event in Shanghai.

Guernsey has had a presence in China for more than a decade and is making steady progress in securing captive business and raising awareness of its insurance solutions.

The event, held on 26 September, advised on how all types of insurance-linked securities (ILS) structures can be managed from Guernsey – including catastrophe bonds, sidecars, collateralised reinsurance and rated reinsurance – with Guernsey-based speakers Charles Scott, from Alternative Risk Management (ARM), and Mark Elliott, from Aon Guernsey, alongside Rufeng Gao from Zhong Lun and Danny Chen from Aon Shanghai.

A panel discussion, which Guernsey Finance China Representative Wendy Weng also took part in, explained how to set up a captive structure, discussing the benefits of having a well-developed finance centre, reasons to securitise catastrophe bond risk, and the development of the relationship between captives and ILS.

Among issues discussed were how investment in ILS allows for diversification, economies of scale and therefore a better yield for investors, Guernsey’s specific rules on Special Purpose Insurance, and the island’s attraction for countries such as Japan, and large institutional investors and fund managers who only deal with rated entities.

Guernsey Finance Deputy Chief Executive Kate Clouston said the event had been well received by Chinese practitioners and added that Guernsey had made significant progress in China and were taking advantage of opportunities in the captive and ILS markets.

“There is a growing interest from companies in China looking for insurance solutions, whether that be risk management or the internationalisation of their business,” Miss Clouston said. “Guernsey is in a unique position to offer them something no other jurisdiction can to achieve their goals.”

“Having Guernsey practitioners present with experience of working in China was a real benefit as delegates could hear direct from the experts.”

ARM Managing Director Charles Scott said the speakers covered all the important topics involved in starting Chinese owned captives.

“Particularly pleasing was the turnout of more than 100 insurance professionals, many of whom I have already met on other business trips,” he added. “It shows there is a real appetite both to learn more about captive operations and their promotion within China. This type of seminar helps cement Guernsey as the top domicile for the emerging Chinese captive market.”

“There is a growing interest from companies in China looking for insurance solutions, whether that be risk management or the internationalisation of their business. Guernsey is in a unique position to offer them something no other jurisdiction can to achieve their goals.”
Guernsey Finance Deputy Chief Executive Kate Clouston

Aon Director of ILS Mark Elliott said: “Aon Guernsey was delighted to support the Guernsey Finance Shanghai Masterclass. We are looking forward to building on the great network that Guernsey Finance has developed in recent years in China, along with supporting our Aon COFCO colleagues in China, to help promote captive, ILS and reinsurance growth.”

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